Monday, January 10, 2011

The Industrial & Prudential Investment Company - Sleep Easy !

The Industrial & Prudential Investment Company Limited ( BSE Code:501298) is a Mumbai based 94-year-old investment company. It is a zero debt company and along with its 100% subsidiary, New Holding & Trading Company limited has an excellent equity investment portfolio. Mr.A.V.Setalvad, who till recently was also the Chairman of KSB Pumps limited, heads the company.
Consolidated Financial Highlights:
Equity: Rs.0.58 crores
Debt: Nil
Current Market Cap: Rs.89 crores (as per price of Rs.1530 on Jan 10,2011)
2009-10 financial highlights:
Revenue: Rs.4.28 crores
Net Profit: Rs.3.85 crores
EPS: Rs.66
Dividend: Rs.12 per share
Equity Portfolio (Includes portfolio of its 100% subsidiary New AgeHoldings)

Number of
Market price
Value
shares
on Jan 10,2011
(Rs.)
ACC. Limited
7000
1023
7161000
Amara Raja Batteries Limited
52500
189
9922500
Andhra Cements Limited
40000
13
520000
Areva T and D India Limited
50000
312
15600000
BASF India Limited
7000
612
4284000
Bharat Electronics Limited
3000
1715
5145000
BEML Limited
8500
971
8253500
Bharat Forge Limited
16000
356
5696000
Bharti Airtel Limited
17500
341
5967500
Bosch Limited
2000
6425
12850000
Century Textile and Industries Limited
1000
400
400000
Dish TV India Limited
5462
64
349568
DR. Reddy’s Laboratories Limited
4000
1653
6612000
Gail (India) Limited
28500
503
14335500
Great Eastern Shipping Company Limited
30400
314
9545600
Great Offshore Limited
7600
366
2781600
Hindustan Unilever Limited
73000
309
22557000
IDBI Bank Limited
15000
151
2265000
Indian Hotels Company Limited
79200
99
7840800
Infosys Technologies Limited
108000
3411
368388000
ITC Limited
9000
170
1530000
Karur Vysya Bank Limited
19200
501
9619200
KSB Pumps Limited
3570000
515
1838550000
Monsanto India Limited
800
1800
1440000
Nagarjuna Construction Company Limited
54000
131
7074000
Nestle India Limited
14000
3800
53200000
NTPC Limited
21000
191
4011000
Orient Abrasives Limited
90000
36
3240000
Piramal Glass Ltd.
4356
110
479160
Piramal Healthcare Ltd.
20000
469
9380000
Piramal Life Sciences Limited
2000
110
220000
Praj Industries Limited
19000
78
1482000
Ranbaxy Laboratories Limited
5173
572
2958956
Reliance Communications Limited
8000
136
1088000
Reliance Industries Limited
16000
1044
16704000
Seamec Limited
8000
133
1064000
Selan Exploration Technology Limited
10000
376
3760000
Siemens Limited
25000
775
19375000
State Bank of India
3800
2577
9792600
Tata Consultancy Services Limited
14000
1134
15876000
Tata Motors Limited
4000
1197
4788000
Tata Motors Limited (DVR)
7850
739
5801150
Tata Power Company Limited
26000
1369
35594000
Tata Steel Limited
10800
660
7128000
Tata Teleservises (Maharashtra) Limited
80000
19
1520000
Titan Industries Limited
14000
3317
46438000
TV TO-DAY Network Limited
8000
65
520000
Wire And Wireless (India) Limited
4750
11
52250
Zee Entertainment Enterprises Limited
9500
133
1263500
Zee News Limited
429
13
5577
BASF India Ltd
800
612
489600
Cambridge Solutions Limited
100
46
4600
Dish TV India Limited
1150
64
73600
GlaxoSmithKline Pharmaceuticals Limited
1000
2390
2390000
GTL Limited
4000
415
1660000
GTL Infrastructure Limited
8000
41
328000
ICICI Bank Limited
6
1013
6078
Infosys Technolgies Limited
4800
3411
16372800
ISMT
43750
61
2668750
KSB Pumps Limited
130000
515
66950000
Mahanagar Telephone Nigam Limited
7000
53
371000
Neyveli lignite Corporation Limited
10000
125
1250000
Onward Technology Limited
2500
50
125000
PVP Ventures Limited
100
12
1200
State Bank of India
3300
2577
8504100
Tata Chemicals Limited
700
375
262500
Tata Steel Limited
6886
660
4544760
Wire & Wireless (India) Limited
1000
11
11000
Zee Entertainment Enterprises Limited
2000
133
266000
Zee News Limited
904
13
11752
Mutual Funds + unlisted
76659259
Current investments
28000000
Mutual Funds ( New Holdings)
5000000
cash
7100000
2837478960
per share value
4892
Market price of Industrial & Prudential
1533
Discount to per share value
68.3


Most of the above are long- term investments and the acquisition cost of the total quoted equity held by the company is just around Rs.24 crores. The total current market value as shown above is approx Rs.283 crores.
At the current market price of Rs.1530 the company is available at a market cap of Rs.89 crores which is less than half of the value of its holding in just KSB Pumps. The per price value of its holdings as per current market price is approximately Rs.4892 per share, while the stock is available at Rs.1530 per share. Normally most Holding companies, depending on the quality of the underlying assets and pedigree of management trade at 30%-50% discount.As shown above, Industrial & Prudential currently trades at approx 68% discount to current  market value.
The future of the company to a large extent is linked to the performance of its associate company- KSB Pumps, in which it hold 21.26% promoter holding. The current year has been a subdued year for KSB Pumps with margins remaining under pressure due to lower margin order intake during the global recession period.KSB Pumps has a very bright future as it is one of the few suppliers with the capability to produce special pumps required for Nuclear power stations.
This is a very simple, uncomplicated holdings play run by a conservative yet efficient management with a very high degree of integrity. Patient investors can use this opportunity to invest in this stock and wait for market to pay the correct price within the next 24 months.

At the time of writing this report, the author /his family have an investment interest in the stock mentioned above. Under no circumstance does the information in this report represent a recommendation to buy or sell the above-mentioned stock.  This report has been prepared and issued on the basis of publicly available information, internally developed data & other sources believed to be reliable. This is just a suggestion solely for information purposes and does not constitute a solicitation to any person to buy or sell a security. While the information contained therein has been obtained from sources believed to be reliable, no responsibility (or liability) is accepted for the accuracy of its contents. Readers using the information contained herein are solely responsible for their actions and are advised to satisfy themselves before making any investments.

1 comment:

  1. One of the top most machinery supply in from Sendhamarai Engineering, most of the industrial company used Pipe Threading Machine.

    ReplyDelete